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TURI, a jump start
🎯 🚗 📈 Rp1,892
Last 12-month cashflow +Rp 191 billion ⬇️

November 21st, 2020
​⏰ 1 minute read
Sales
We were too optimistic on sales before, in the third quarter we were too pessimistic. Sales jumped 34% from the second quarter & were 6% above our forecast at Rp 1.72 trillion. Vehicle sales were up +33%, services +80%! We expect this recovery to continue with sales rising back to Rp 2.46 trillion by the third quarter of next year.

Cashflow
Despite sales higher than the second quarter, cashflow was lower at Rp 27 billion & lower than our forecast Rp 45 billion as investment spending was a higher Rp 70 billion. We expect a lower again Rp 29 billion investment spending which when combined with our higher sales gives an average quarterly free cashflow Rp 60 billion this 12 months.

Sales recovering, heading towards net cash, with higher payouts, higher target price ...

Data file & model
Balance sheet
The balance sheet net debt which was at Rp 1 trillion as recently as late 2018 has moved closer to net cash at Rp 242 billion in the third quarter. With our forecast free cashflow & assuming there’s a dividend payout of Rp 49 billion, the net debt will be down to only Rp 51 billion in 12 months time.

Profit
After a first in five years loss in the second quarter, net profit was back with a +Rp 21 billion in the third quarter. The cash cost ratio of net profit add back depreciation minus sales as a % of sales was as forecast 96%. We use the same 96% to predict a next 12 months profit Rp 166 billion.

Value
TURI has now paid Rp 970 billion of capital in the last 5 years. At Rp 7.42 trillion market cap, it’s 7.65X the capital paid 0.83X sales, 1.3X assets, 1.31X equity with a 4.1% profitability & a 0.7% yield. Our cashflow forecast is raised to Rp 241 billion. At 1.6% with a 0.7X adjustment gives a higher target price, Rp1,892.
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